Feds taking over permits for Texas plants

PEGGY FIKAC, AUSTIN BUREAU

Published 5:30 am, Tuesday, May 25, 2010

AUSTIN — Objecting to how Texas regulates air pollution, the U.S. Environmental Protection Agency said Tuesday it is taking over the issuance of an operating permit for a Corpus Christi refinery and could step in at some 39 other major facilities across the state.

“I think the writing will be on the wall — unless we start seeing better permits that address our objections, we are very likely to begin federalizing others,” EPA Regional Administrator Al Armendariz said in a telephone interview. “The state is not following federal Clean Air Act requirements.”

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Tuesday's unprecedented action affected a Flint Hills Resources refinery in Corpus Christi. The EPA's action means the facility must submit an application with detailed information to the federal agency, which could approve or deny a permit.

The company said it was evaluating a letter from the EPA notifying plant officials of the move.

The list of facilities that could come next the include chemical plants, refineries and other facilities, such as the Goodyear Tire & Rubber plants in Bayport and Houston, the Motiva Enterprises Houston terminal, Rhodia Inc.'s Houston plant, the Chevron Phillips Cedar Bayou facility and Valero's Texas City facility. Other company permits that have drawn scrutiny from the EPA include Exxon Mobil, Dow Chemical Co. and Formosa Plastics.

“We've never objected to 40 permits issued by a state permitting authority, and we've not federalized a permit in a state in this manner before unless we were requested to do so by a state or a particular facility,” Armendariz said. “The action we're taking today, together with the 40 objections, is unprecedented.”

The Texas Commission on Environmental Quality, which issues permits, released a letter from Executive Director Mark R. Vickery to the EPA that lays out the state agency's efforts and communication with the EPA and said it “remains committed to reaching resolution of Title V (operating permit) objections.”

“We still have significant differences in opinion on a number (of) issues, but processes for moving forward have been developed,” Vickery wrote. “A collaborative effort will continue to be beneficial for both agencies' limited resources and the continued protection of the environment and public health.”

Flexible permit at issue

Under the Clean Air Act, states must develop plans to meet federal requirements aimed at protecting public health. The EPA has been meeting with the TCEQ and representatives of industry and environmental groups to discuss what the federal agency calls deficiencies with air emission permits.

A major point of contention is the state's use of a so-called flexible permit, which sets an air emissions cap for an entire facility, but allows leeway for various units within that plant. Regulators and environmental groups say that hinders enforcement of clean-air rules, and Armendariz said that type of permit never has been federally approved.

The EPA also objects to a process that allows a facility to make changes without going through a formal permitting process, Armendariz said.

“I think it's another step in requiring some of the biggest air pollution sources in Texas to get permits that comply with the Clean Air Act,” said Kelly Haragan, director of the University of Texas' environmental law clinic, which has been representing “environmental justice” groups in Houston and Corpus Christi on air permitting issues. “Hopefully, those permits will include clear emission limits and better monitoring so that the public and the agencies can track compliance and take enforcement action if facilities aren't complying.”

Strong objections

Business and industry groups called the EPA action wrongheaded.

“EPA has either been told or been convinced by environmental groups that the permitting program that Texas operates is somehow deficient or not completely consistent with federal law. Our position, and the position of both the chemical manufacturers and refineries that are covered by these state permits, is that those allegations are completely false and without any foundation,” said Stephen Minick, of the Texas Association of Business.

Minick called it “a complete waste” and “very expensive” for companies to have to submit applications to the EPA, predicting that at the end of the process, the federal agency would find they met all applicable requirements.

Hector L. Rivero, Texas Chemical Council president and chief executive officer, said, “This is the first time we are aware of EPA demanding a Texas facility apply directly to the federal government for a Title V (operating) permit. . . . We are incredulous that EPA would encroach on a state regulatory program that has a proven track record of success.”

Armendariz said if TCEQ wants to retain authority over the rest of the permits at issue, state officials must “demonstrate to me in very short order ... that these permits they are going to issue are going to be consistent with the Clean Air Act.”

“Some agency has to be issuing permits that are complying with the Clean Air Act,” he said. “If the state of Texas won't do it, then I have the legal obligation to assume that role.”